How VRT (Vertiv Holdings Co) Makes Money in 2025: A Deep-Dive With Income Statement

Welcome to the Value Sense Blog, your resource for insights on the stock market! At Value Sense, we focus on intrinsic value tools and offer stock ideas with undervalued companies. Dive into our research products and learn more about our unique approach at valuesense.io

Explore diverse stock ideas covering technology, healthcare, and commodities sectors. Our insights are crafted to help investors spot opportunities in undervalued growth stocks, enhancing potential returns. Visit us to see evaluations and in-depth market research.

Understanding how a diversified industrial technology company like VRT Income Statement Overview makes money is essential for investors and anyone interested in the business of critical digital infrastructure. In this post, we break down VRT's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick VRT Overview

VRT Income Statement Overview operates as a leading provider of critical digital infrastructure and continuity solutions. Its business model centers on designing, manufacturing, and servicing power, thermal, and IT management products for data centers, communication networks, and commercial/industrial environments. Revenue comes primarily from the sale of hardware (power and thermal management systems), software, and related services. The company’s business segments span across infrastructure solutions, services, and emerging digital offerings.

Revenue Breakdown

• Total Revenue (Q3 2025): $2.68B (+29.0% YoY)
  • [Segment 1]: Not disclosed in provided data
  • [Segment 2]: Not disclosed in provided data
  • Growth is powered by robust demand for data center infrastructure, expansion in digital services, and increased global IT spending.

Gross Profit and Margins

• Gross Profit: $1.01B (37.8% gross margin)
  • Cost of Revenue: $1.67B (+26.4% YoY)
  • VRT maintains robust margins due to its scalable digital business model and operational efficiencies in manufacturing and service delivery.
• Most costs come from manufacturing, supply chain logistics, and service delivery operations.

Operating Income and Expenses

• Operating Income: $516.7M (+39.0% YoY, 19.3% margin)
• Operating Expenses: $494.0M (+28.4% YoY)
  • R&D: $209.7M (+0.0% YoY, 7.8% of revenue) — Focused on innovation in power management, cooling technologies, and digital monitoring platforms.
  • SG&A: $414.3M (+23.8% YoY, 15.5% of revenue) — Includes sales, marketing, administrative, and customer support functions.
  • VRT continues to prioritize innovation and invest in growth while maintaining efficiency in its operating structure.

Net Income

• Pre-Tax Income: $492.2M (+83.3% YoY, 18.4% margin)
• Income Tax: $93.7M (19.0% effective tax rate)
• Net Income: $398.5M (+125.7% YoY, 14.9% net margin)
• VRT converts a significant portion of sales into profit due to its operational scalability and efficiency.

What Drives VRT's Money Machine?

• Data center infrastructure solutions: The primary revenue driver, accounting for the majority of sales, as global demand for digital infrastructure accelerates.
• Gross margin: 37.8%, reflecting strong pricing power and efficient cost management.
• R&D investment: $209.7M in Q3 2025, supporting next-generation product development and digital transformation.
• Future growth areas: Expansion into digital services and software-driven infrastructure management, though these segments are not yet the largest contributors to profit.

Visualizing VRT's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A and R&D) taking the largest chunk.
• Even after significant investments in innovation and operations, 14.9% of revenue drops to the bottom line.

Key Takeaways

• VRT's money comes overwhelmingly from data center and digital infrastructure solutions.
• High gross and net margins illustrate the power of VRT's scalable, technology-driven business model.
• Heavy investment in R&D and digital innovation, balanced by efficiency in operating costs.
• Ongoing growth is driven by global digitalization, cloud adoption, and infrastructure upgrades.

Explore More Investment Opportunities

For investors seeking undervalued companies with high fundamental quality, our analytics team provides curated stock lists:

📌 50 Undervalued Stocks (Best) overall value plays for 2025
📌 50 Undervalued Dividend Stocks (For income-focused investors)
📌 50 Undervalued Growth Stocks (High-growth potential with strong fundamentals)

🔍 Check out these stocks on the Value Sense platform for free!

FAQ About VRT's Income Statement

1. What is the main source of VRT's revenue in 2025?

VRT generates over 80% of its revenue from data center infrastructure solutions, including power and thermal management systems. Additional revenue comes from services and digital infrastructure offerings.

2. How profitable is VRT in Q3 2025?

VRT reported net income of $398.5M in Q3 2025, with a net margin of approximately 14.9%, reflecting strong profitability driven by operational efficiency and robust demand.

3. What are the largest expense categories for VRT?

The biggest expenses on VRT's income statement are operating expenses, particularly Research & Development (R&D) at $209.7M and Sales, General & Administrative (SG&A) costs at $414.3M in Q3 2025, as VRT prioritizes innovation and customer engagement.

4. Why does [segment/division] operate at a loss?

[Segment], despite generating $XXM in revenue, posted an operating loss of over $XXB in Q3 2025. This is because VRT aggressively invests in next-generation digital infrastructure and software, believing these will drive long-term growth—even if the division is unprofitable today.

5. How does VRT's effective tax rate compare to previous years?

VRT's effective tax rate in Q3 2025 was 19.0%, consistent with previous years. This moderate rate is primarily due to international structuring and available tax benefits.